Following a year of decline in the number of women that make up its workforce, Microsoft says it will now tie executive bonuses to the company’s diversity efforts, according to a report in Bloomberg. The move is a form of pressure to incentivize top leadership to reform the company’s hiring practices in an effort to include more women and minorities. After Microsoft wrote off the acquisition of Nokia’s handset unit and fired thousands of employees, it saw its percentage of female employees dip to 25.8 percent from 26.8 percent a year ago.
The move mirrors that of fellow tech company Intel, which in August of 2015 announced it would commit $300 million to improve the diversity of its workforce. As part of the initiative, Intel CEO Brian Krzanich said his company would tie executive compensation to meeting the diversity goals it sets. As of February 2016, Intel has surpassed its initial goals by raising the number of women and minorities represented in new hires to 43 percent.
Microsoft is following Intel by financially pressuring its leadership to diversify hiring
So while Intel has shone that this strategy works, there’s also a personal element at play. Microsoft CEO Satya Nadella is still reminded regularly of a controversy he sparked two years ago when speaking at the Grace Hopper Celebration, a women in tech conference held annually in Houston, Texas. When asked how women should go about actively closing the pay gap, Nadella adviser the audience of women technologists to have faith and hope for adequate rewards, instead of asking to be paid fairly.
It did not go over well. “I answered that question completely wrong,” Nadella said in a statement issued after his onstage appearance. “If you think you deserve a raise, you should just ask.” The aftermath of the gaffe has made diversity a particular focus of Nadella at Microsoft, and the executive has shifted funding to help bolster internship programs and better equip the company’s human resources group to meet diversity goals.
“Diversity and inclusion is something you’ve got to ingrain, you’ve got to keep talking about the business value, you’ve got to keep talking about the impact,” said Gwen Houston, Microsoft’s chief diversity and inclusion officer, in an interview with Bloomberg. “That’s what Satya has been doing. We, of course, have more to do.”